Malaysia’s Ex-Leader, Najib Razak, Is Charged in Corruption Inquiry

Image

Former Prime Minister Najib Razak arriving Wednesday morning at a courthouse in Kuala Lumpur, the Malaysian capital. He was charged with corruption and criminal breach of trust.CreditCreditLai Seng Sin/Reuters

KUALA LUMPUR, Malaysia — Najib Razak, the former prime minister of Malaysia who was ousted in an election two months ago, was charged by anticorruption officials on Wednesday, after his arrest in an investigation involving billions of dollars diverted from a state investment fund.

He was charged with three counts of criminal breach of trust and one count of corruption in connection with the investment fund scandal. He pleaded not guilty on all counts.

Atop a political machine that had governed Malaysia since its independence in 1957, Mr. Najib and his allies used political influence, cash handouts and news media repression to try to keep corruption accusations at bay for years.

American prosecutors have accused Mr. Najib, 64, of diverting into his personal bank account $731 million from the state investment fund, which he supervised for years. Money siphoned from the fund, known as 1MDB, was then spent on luxury goods, such as a $27.3 million pink diamond necklace that was worn by Mr. Najib’s wife, American investigators said.

The United States Justice Department said that at least $4.5 billion from 1MDB was laundered through American financial institutions and misspent by Mr. Najib, his family and associates.

A spokesman for Mr. Najib called the arrest “politically motivated and the result of political vengeance” by Mr. Mahathir and the opposition that now governs Malaysia.

Mr. Najib has denied any wrongdoing.

He spent Tuesday night in lockup at the Malaysian Anti-Corruption Commission headquarters in Putrajaya, the country’s administrative capital, officials said.

In a statement, a Malaysian government task force investigating the 1MDB affair said that Mr. Najib had been arrested in connection with SRC International, a onetime subsidiary of 1MDB. In late May, Mr. Najib was questioned for five hours on how tens of millions of dollars from SRC International appeared to have ended up in his private bank account.

“It is obvious that he has stolen money,” Mr. Mahathir said. “We have enough evidence. It’s not a question of seeking revenge, no. It is just the application of the rule of law.”

Mr. Najib is the son of one Malaysian prime minister and the nephew of another. With his gilded upbringing, among the elite of the United Malays National Organization, Malaysia’s longtime governing party, he seemed destined for leadership.

But even before he became prime minister in 2009, scandal dogged him.

The Mongolian mistress of one of his aides was killed in 2006, and two of Mr. Najib’s bodyguards were convicted of her murder. Mr. Najib has also been investigated by French officials in connection to $130 million in kickbacks on a deal to purchase French submarines.

The 1MDB scandal surfaced in 2015, and American prosecutors say that money diverted from the fund was spent on staggering acquisitions, such as a $250 million yacht owned by a friend of Mr. Najib’s stepson.

Malaysian investigators are also looking into whether money from 1MDB was used to fund Mr. Najib’s re-election campaign.

Mr. Mahathir said that in a private conversation in 2015, Mr. Najib told him that “cash is king,” a reference to money politics in Malaysia.

“When he said that cash is king,” Mr. Mahathir said of Mr. Najib, “what he was saying is that corruption is O.K.”